Science Fiction is Swiftly Becoming Fact

Exponential technologies, from artificial intelligence to digital manufacturing to synthetic biology, are set to “digitise, dematerialise, demonetise and democratise” entire industries, disrupting old business models and giving rise to new breakthroughs, say experts from the Silicon Valley-based Singularity University.

BUDAPEST, Hungary — The future is coming much faster than we think. Technological developments that may seem like science fiction — robots with artificial intelligence or synthetic lifeforms, for example — are just around the corner, if not here already, and set to radically reshape all industries, including fashion. This was the main thrust of a recent conference in Budapest, organised by the Singularity University, a Silicon Valley-based learning institution, founded by Peter Diamandis and Ray Kurzweil, and sponsored by Google, Nokia, the X Prize Foundation, Genentech and others.

Moore’s Law is the observation that, ever since its arrival, computing power has been doubling every 18 to 24 months. There is debate as to whether Moore’s Law is sustainable. Some say we are rapidly reaching the physical limits of how much computing power we can inexpensively place on a silicon chip, while others say new materials like carbon nanotubes will replace silicon microprocessors, ushering in incredible leaps in performance. But assuming the current rate of accelaration, by 2030, a smartphone will have the processing power of a human brain. By 2040, the world’s most powerful supercomputer will have the processing power of the entire human race.

What’s more, as entire sectors of the economy — from manufacturing to transportation to retail — become increasingly computing-based, they, too, will begin to advance exponentially. This is the fundamental concept behind the rise of “exponential technology,” which, according to Salim Ismail, a strategist and entrepreneur based in Silicon Valley, will continue to “digitise, dematerialise, demonetise and democratise” whole industries, disrupting old business models and giving rise to new breakthroughs, much like what has happened to the music business as a result of digital audio files and streaming Internet services like Spotify (which make large volumes of music available to all, extremely cheaply), only at a much faster rate.

“Technology is vaporising the world,” said Ismail. And, as a result, “the metabolism of the economy is increasing.”

One key driver of change will be artificial intelligence, which is becoming radically accessible much faster than anyone ever imagined. In fact, just last week, IBM made a more powerful version of “Watson,” its artifical intelligence system famous for beating humans on the game-show “Jeopardy!” (which cost millions of dollars to create), available to small companies, and even indiviuals, as a pay-as-you-go cloud service.

“Artificial intelligence is a general fulcrum for accelarating all other technology,” said Brad Templeton, a Silicon Valley-based software architect and entrepreneur who was a consultant on Google's self-driving car, defined by US law as "a motor vehicle that uses artificial intelligence, sensors and global positioning system coordinates to drive itself without the active intervention of a human operator.”

Templeton believes the technology powering the self-driving car will not only transform personal transportation, but reshape fashion retail. “Deliveries of online purchases will be revolutionised,” he said, painting a scenario where clothing and accessories could be delivered within minutes, at low cost, by intelligent, self-guided delivery bots, which could also wait while customers try on merchandise and handle any returns. What this means for the future of the physical store, and the shopping streets and malls that house them, remains to be seen. For one thing, immediacy will be much less of a reason to visit stores than it is today.

Another major driver of change will be the rise of 3D printing and digital manufacturing, including easy-to-use digital fabrication tools and online assembly services, which are set to radically lower barriers to entry by making the tools of factory production available to everyone. Indeed, manufacturing may soon become just another cloud computing service available at the click of a mouse, with no penalty for short production runs, unleashing a wave of entrepreneurship and cottage industry.

According to several experts, 3D printing is currently over-hyped and will pass through a “valley of disillusionment” before having widespread impact. But by 2020, Ray Kurzweil predicts that we’ll start to see 3D printing of clothing. This will create a new market for “open source” apparel that can be downloaded and printed at incredibly low cost, as well as the possibililty for piracy. In the premium market, “people will always pay for the latest designs,” said Kurzweil, although business models will surely have to evolve.

But digital manufacturing isn’t the only disruptive technology set to impact the production of clothing. “If you’re making something out of atoms, biology will be involved,” said Raymond McCauley, a biotech entrepreneur and consultant who pointed to a company called Modern Meadow, which engineers and “bioprints” leather (as well as meat), offering a more sustainable, cost-effective and ethical alternative to traditional methods.

McCauley — who runs BioCurious, a Silicon Valley-based “hackerspace,” providing low-cost access to biotech equipment and lab space for “amateurs, inventors and entrepreneurs” — is an expert in the emerging field of “digital biology” which enables biologists to not just read, but actually write genetic code. This already makes it possible for companies to digitally design and manufacture the kind of “synthetic life” that could one day be harnessed to “grow” things like self-repairing, self-cleaning garments and accessories that can reproduce themselves and receive updates (new colours, patterns and materials, for example) much like software updates on a mobile device.

Biotechnology will also open up radical new possibilities for personal aesthetic transformation that go way beyond clothing and accesssories. “With biotechnology, we’ll have greater ability to change the very nature of our bodies,” said Kurzweil, pointing to the growing cultural acceptance of body enhancements. Imagine a tattoo that could grow over time, said McCauley. Or a pair of designer eyebrows. Indeed, in this future, “fashion designers, and those responsible for style, will become even more important, because we’ll have so many more ways to change who we are,” predicted Kurzweil.

But for most of the world’s largest fashion companies, many of which have only recently come to terms with developments like social media, the coming pace of change will be hard to digest, creating opportunity for lean upstarts. “The technology that used to cost $100,000 is now available in a Hello Kitty toy,” said Templeton. This means small teams of people with limited resources can act with speed and impact like never before, threatening incumbent players with disruptive business models.

John Hagel, an author and consultant focused on the intersection of business strategy and information technology, told the story of the Red Queen from Lewis Carroll's Through the Looking-Glass, who finds she has to run faster and faster just to stay in the same place. The same could be said of large incumbents. But in the face of what Hagel called "mounting performance pressure," how are these companies to cope?

The fact is, they must change or perish.

"Exponential organisations" — the kind that can keep pace with exponential change — are those that embrace “collaborative technologies, multi-skilled teams, fast iteration, extreme distributed authority and leverage the crowd,” said Ismail.

But “it's not enough to think in terms of technology innovation and product innovation, or even process innovation or business model innovation,” stressed Hagel. Exponential technology cuts right to the core of why a firm even exists in the first place, forcing companies to re-evaluate themselves and innovate on an organisational level.

Traditionally, companies exist to deliver "scalable efficiency," said Hagel. But now that networked technology makes it increasingly easy to coordinate activity across firms, is the traditional idea of a company still valid?

It's time for firms to focus, not on "scalable efficiency," but "scalable learning," argued Hagel. Indeed, in the face of rapid technological change, this may be the only way for organisations to advance quickly enough to survive.

"The fact is, there are many more smart people outside your company than inside,” Hagel continued. “[And firms] learn much faster as part of a network." This kind of institutional innovation isn't happening in the West, but in places like India and China, he said, giving the example of Li & Fung, a $20 billion global sourcing firm that supplies large volumes of time-sensitive fashion goods (including a staggering 40 percent of all apparel sold in the US) by working with a loosely knit, but tightly coordinated global network of over 15,000 partners.

But for even the most visionary executives, making the large-scale changes required to reorganising a company around the kind of networked, learning-focused model that can cope with exponential change isn't easy. And more often than not, change-averse "antibodies" inside a company, who have entrenched interests, swarm and kill attempts at institutional innovation before they get off the ground. Rather that taking a "big bang" approach that attempts to drive major change at the core of a company, success will come from what Hagel called "scaling edges."

Indeed, by focusing on the edges rather than the core of a company, executives are more likely to achieve significant and sustainable returns, while circumventing scrutiny and organisational resistance, he said. “And by accelerating learning rather than focusing solely on short-term outcomes, edges can become conduits of transformation.”

A promising edge must satisfy three conditions: it must have the potential to scale to become the new core of the company; it should not cannibalise the core; and it should not require large amounts of investment. In fact, companies should "starve the edge," said Hagel, "to keep it lean and force it to work with third-parties and adopt an ecosystem mindset."

With this approach, it's just possible that forward-thinking firms will manage to keep pace with change and achieve the kind of institutional innovation required to tackle the threats and seize the opportunities created by exponential technology, said Hagel.